TrumpCare - Joint Economic Committee

TrumpCare: Leaving Rural Health behind

U.S. Congress Joint Economic Committee Ranking Member Martin Heinrich Minority Staff Report, May 2017

TrumpCare: Leaving Rural Health Behind America’s rural communities have long faced challenges with access to affordable health insurance and services. Doctors and hospitals are farther away, higher poverty rates lead to worse health outcomes and lower coverage rates, and older populations result in more expensive coverage pools. The Affordable Care Act (ACA) made progress in addressing these challenges, and rural residents were more likely than urban residents to gain coverage as a result of the law. 1 Between 2013 and 2015, the uninsured rate for rural Americans fell from 17 to 12 percent. 2 Rather than building on this progress, TrumpCare – the Republican plan to repeal and replace the ACA – would raise costs and have devastating impacts on rural America. Many rural Americans who live in Medicaid expansion states would lose coverage. Eliminating need-based tax credits that reduce the cost of purchasing health insurance would disproportionately impact rural Americans, who are more likely to receive tax credits under current law. 3 Fewer insured individuals could result in many rural hospitals closing, harming whole communities that rely on them. All of this will be compounded by the rest of the Trump agenda, which would worsen health outcomes for rural Americans. TrumpCare 2.0, which recently passed the House, would be even worse for rural communities, putting coverage at risk for the 20 million rural Americans who have a pre-existing condition.4

TRUMPCARE LOWERS COVERAGE FOR RURAL AMERICA Figure 1. Source of Health Insurance, for Rural and Non-Rural Americans

TrumpCare would make it substantially

harder for rural Americans to obtain health insurance. The Congressional Budget Office (CBO) estimated that 24 million Americans would lose health insurance under the original version of the bill—many of whom will come from rural America. Rural Americans are more likely than urban Americans to receive coverage from both individual insurance markets and Medicaid (see Figure 1). Altogether, 2.9 million rural Americans could lose coverage by 2020 under the bill—including many of the 1.7 million rural Americans that gained coverage through the Medicaid expansion. 5

100%

89% 88%

80%

Non-Rural

60%

55%

Rural 48%

40%

20%

13% 15%

20%

23%

0% Overall Insured

Employer

Individual Market

Medicaid

Source: JEC calculations using American Community Survey data, 2014-2015 Note: Insurance rates displayed include both pre- and post-ACA open enrollment

data, and are likely lower than current insured rates TrumpCare is more likely to hurt older, poorer Americans, who are more likely to live in rural areas. 6 In 2015, the rural poverty rate was

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almost 3 percentage points higher than in urban areas. 7 Rural residents are on average 2.4 years older than urban residents and are more likely to be 50 to 64 years old, a group that TrumpCare will disproportionately hurt. 8 CBO estimated that a 64 year-old with an income of $26,500 would have to pay $14,600 a year for health insurance. And it’s likely to be even higher in rural areas, where people are more spread out and health care costs tend to be higher. 9 Since TrumpCare fails to adjust tax credits for the costs that residents actually experience in their local marketplaces, the bill would be even more devastating for individuals and families living in these areas. For rural Americans and their families, premiums will rise, tax credits will be less generous, and coverage rates will fall.

FARMERS AND RANCHERS DISPROPORTIONATELY HARMED Prior to the ACA, many workers in the agriculture sector went without health insurance coverage, most commonly due to excessive cost.10 ACA tax credits based on income gave farmers and ranchers greater access to insurance. Farmers and ranchers are more than twice as likely to get health insurance in individual markets as workers in other industries (see Figure 2).

Figure 2. Source of Health Insurance, for Workers in Agricultural and Non-Agricultural Sectors 100% 88% 80%

73%

Non-Ag

69%

Agricultural

60%

40%

41%

22% Given that farmers and ranchers typically 20% 11% 11% earn less than workers in other sectors, 8% removing need-based tax credits would 0% greatly impact their ability to retain Overall Employer Individual Medicaid Insured Market insurance on the individual markets. 11 Since less than half of farmers and Source: JEC calculations using American Community Survey data, 2014-2015 Note: Insurance rates displayed include both pre- and post-ACA open enrollment ranchers receive insurance from their data, and are likely lower than current insured rates employers, many would be left uninsured. Some states would be particularly hard hit: 49 percent of farmers and ranchers in North Dakota, 45 percent in South Dakota, and 44 percent in Iowa rely on individual markets to obtain health insurance. 12

Given that farmers and ranchers typically earn less than workers in other sectors, removing need-based tax credits would greatly impact their ability to retain insurance on the individual markets.


TRUMPCARE HURTS RURAL HOSPITALS Americans in rural areas already have less access to health care than urban Americans. They typically have to travel farther to receive care, particularly for specialized services, and have limited public transportation to get there. 13 TrumpCare would lead to many rural hospitals shutting their doors. Rural hospitals depend heavily on Medicaid—11 percent of their payments come from Medicaid—and would be disproportionately hurt by the proposed $839 billion in Medicaid cuts. 14 The Medicaid expansion has stabilized balance sheets for many rural hospitals; those in expansion states saw a four percentage point increase in operating margins. 15 This effect can be seen in the fact that fewer rural hospitals have closed in Medicaid expansion states than in other states since the enactment of the ACA. 16 Reversing the expansion and cutting Medicaid would be devastating for these hospitals and destroy this progress. The Medicaid expansion has stabilized balance sheets for many rural hospitals, those in expansion states saw a four percentage point increase in operating margins. Reversing the expansion and cutting Medicaid would be devastating for these hospitals and destroy this progress. Lower coverage rates in the individual marketplaces under TrumpCare would also increase uncompensated care charges at rural hospitals. Before the ACA, uncompensated care placed a financial burden of more than $4 billion annually on rural hospitals. 17 After the ACA, uncompensated care costs as a share of operating budgets fell by about half in expansion states. 18 Next year, new uncompensated care just from private insurance losses could cost over $7 billion nationally under TrumpCare. 19 The ballooning costs would further squeeze rural hospital finances. Residents in rural areas depend upon hospitals for more than just health care. Hospitals are a major employer and source of economic growth. When a single hospital closes, nearly 100 jobs are lost on average, taking more than $5 million in wages, salaries, and benefits out of the local economy. 20 The effects ripple out into the local economy as well—for every ten rural hospital employees that lose their jobs, an additional 3.8 jobs are lost elsewhere in the community. 21 If the 673 at-risk hospitals were to close, 99,000 hospital employees and a further 38,000 other rural residents would lose their jobs. 22


THE TRUMP AGENDA EXACERBATES THE PROBLEM FOR RURAL COMMUNITIES TrumpCare would devastate the health and economies of rural America, and its effects would be compounded by the rest of the Trump agenda. The budget that President Trump has put forward would have a substantial negative impact on the health of rural Americans if passed. Proposals in the President’s budget that would harm rural Americans’ health include: • Eliminating USDA’s Water and Waste Disposal Loan and Grant program, impacting rural Americans’ access to clean water. 23 • Lower USDA funding would likely impact the USDA Distance Learning and Telemedicine Grants program, which connects rural residents with health care and substance abuse treatment that they otherwise would not have access to. 24 • Cutting the Environmental Protection Agency budget by 31 percent, leading to lower air and water quality and worse health outcomes for all Americans. 25 • Cutting the National Institutes of Health budget by $5.8 billion, limiting the agency’s ability to conduct cutting edge research into addressing many of the health issues that plague rural Americans. 26 • Eliminating $403 million in health professional and nurse training program funding, further exasperating hospitals’ challenges in finding qualified health workers. 27 Budget cuts that lead to worse health outcomes for rural Americans, combined with the lower insured rates and fewer rural hospitals that come with TrumpCare, would undermine the health of rural Americans.

CONCLUSION TrumpCare would hurt all Americans, but rural Americans would be hit especially hard. They would lose coverage gains made under Medicaid, receive less generous tax credits that would price them out of the individual markets, and many of the hospitals that they rely on for care could be forced to close.


Table 1. Percent of Residents with Medicaid Coverage Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware D.C. Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming

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Overall 19.9 17.9 21.5 25.2 25.1 18.5 20.1 19.5 27.2 18.6 17.9 17.3 16.3 19.9 16.8 18.2 14.2 24.9 22.2 21.2 17.7 23.5 21.9 17.5 25.1 15.0 15.5 13.4 17.8 11.9 16.8 29.8 25.3 18.7 11.3 20.3 17.6 23.5 17.9 22.8 19.6 14.3 20.4 17.5 11.2 25.7 11.9 20.1 25.8 17.5 12.7

Rural Areas 23.3 29.1 39.6 27.8 28.9 15.2 17.4 N/A N/A 25.8 23.9 26.3 15.8 20.9 16.7 19.2 16.5 32.3 24.5 24.7 N/A N/A 22.7 21.6 28.7 19.7 16.1 14.4 19.4 15.0 N/A 28.6 25.3 24.3 15.9 21.1 17.9 29.7 19.3 N/A 28.4 16.2 24.6 20.5 13.7 27.7 20.7 26.2 29.0 17.3 11.8

Agricultural Workers 6.7 16.2 22.9 15.1 26.8 14.5 15.7 N/A N/A 9.6 6.2 14.5 7.4 9.5 6.0 8.1 4.4 17.5 8.8 16.6 12.4 23.7 15.4 11.6 9.9 6.0 6.7 6.0 4.9 13.5 9.2 21.2 20.4 7.9 4.4 10.1 5.8 20.4 10.0 N/A 7.9 2.4 12.6 6.0 4.5 29.8 3.6 15.4 13.5 11.1 4.7

Source: U.S. Census Bureau, American Community Survey, 2014-2015 Notes: 2-year estimates are used to all for sectoral breakdowns; includes both pre- and post-open enrollment data; current Medicaid coverage rates are likely higher; N/A denotes data not available in all ostates c r adue t i to c sample S t a fsize f orestrictions f the Joint Economic Committee

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Karpman, Michael, Stephen Zuckerman, Genevieve M. Kenney, and Yvette Odu. “Quicktake: Substantial Gains in Health Insurance Coverage Occurring for Adults in Both Rural and Urban Areas.” Urban Institute. April 16, 2015. 2 Throughout the report, rural refers to residents of nonmetropolitan areas (as defined by the U.S. Census Bureau). The uninsured rate is for nonelderly population only. Cross-Call, Jesse, Tara Straw, Arloc Sherman, and Matt Broaddus. “House-Passed Bill Would Devastate Health Care in Rural America.” Center on Budget and Policy Priorities. May 16, 2017. 3 Avery, Kelsey, Kenneth Finegold and Xiao Xiao. “Impact of the Affordable Care Act Coverage Expansion on Rural and Urban Populations.” U.S. Department of Health and Human Services. June 10, 2016. 4 JEC Democratic Staff calculations based on data from from the American Community Survey 2015 5 year sample. 5 Kendall, David. “American Health Care Act: Devastating for Rural America.” Third Way. March 21, 2017; see also, Cross-Call, Jesse, Tara Straw, Arloc Sherman, and Matt Broaddus. “House-Passed Bill Would Devastate Health Care in Rural America.” Center on Budget and Policy Priorities. May 16, 2017. 6 U.S. Congressional Budget Office. “American Health Care Act.” March 13, 2017. 7 U.S. Department of Agriculture, Economic Research Service. “Poverty Overview.” March 1, 2017. 8 Joint Economic Committee Calculations from 2015 American Community Survey. 9 Cross-Call, Jesse, Tara Straw, Arloc Sherman, and Matt Broaddus. “House-Passed Bill Would Devastate Health Care in Rural America.” Center on Budget and Policy Priorities. May 16, 2017. 10 Farmworker Justice & The National Center for Farmworker Health. “Farmworkers’ Health Fact Sheet.” January 2015. 11 All occupations for sector 11 and cross-industry: Bureau of Labor Statistics. Occupational Employment Statistics. 12 JEC Democratic Staff calculations based on data from the 2014 and 2015 American Community Survey. 13 Mattson, Jeremy. “Transportation, Distance, and Health Care Utilization for Older Adults in Rural and Small Urban Areas.” Small Urban & Rural Transit Center, Upper Great Plains Transportation Institute, North Dakota State University. December 2010. 14 Topchik, Michael. “The Rural Relevance Study.” NRHA Policy Institute. February 7, 2017; Cross-Call, Jesse, Tara Straw, Arloc Sherman, and Matt Broaddus. “House-Passed Bill Would Devastate Health Care in Rural America.” Center on Budget and Policy Priorities. May 16, 2017. 15 Kaufman, Brystana, Kristin L. Reiter, George H. Pink, and George M. Holmes. “Medicaid Expansion Affects Rural and Urban Hospitals Differently.” Health Affairs, vol. 35. September 2016; see also, Fredric Blavin. “How Has the ACA Changed Finances for Different Types of Hospitals? Updated Insights from 2015 Cost Report Data,” Urban Institute. April 2017; see also, Cross-Call, Jesse, Tara Straw, Arloc Sherman, and Matt Broaddus. “House-Passed Bill Would Devastate Health Care in Rural America.” Center on Budget and Policy Priorities. May 16, 2017. 16 Kendall, David. “American Health Care Act: Devastating for Rural America.” Third Way. March 21, 2017. 17 Data for 1999-2000. Bennett, KJ, CG Moore, and JC Probst. “Estimating Uncompensated Care Charges at Rural Hospital Emergency Departments.” Journal of Rural Health. Summer 2007. 18 Cross-Call, Jesse, Tara Straw, Arloc Sherman, and Matt Broaddus. “House-Passed Bill Would Devastate Health Care in Rural America.” Center on Budget and Policy Priorities. May 16, 2017. 19 Joint Economic Committee Democratic Staff calculations using CBO projections of the uninsured and Garthwaite, Craig, Tal Gross, and Matthew J. Notowidigdo. “Who Bears the Cost of the Uninsured? Nonprofit Hospitals.” Kellogg Insight. 20 Docksen, Gerald A, Cheryl F. St. Clair, and Fred C. Eilrich. “Economic Impact of Rural Health Care.” National Center for Rural Health Works. October 2016. 21 Docksen, Gerald A, Cheryl F. St. Clair, and Fred C. Eilrich. “The Economic Impact of a Critical Access Hospital on a Rural Community.” National Center for Rural Health Works. September 2012. 22 Ellison, Ayla. “673 Rural Hospitals Vulnerable to Closure: 5 Things to Know.” Becker’s Hospital Review. February 3, 2016; see also, Docksen, Gerald A, Cheryl F. St. Clair, and Fred C. Eilrich. “The Economic Impact of a Critical Access Hospital on a Rural Community.” National Center for Rural Health Works. September 2012. 23 Jerome, Sara. “Proposed Trump Budget Would Slash Rural Water Funding.” Water Online. March 22, 2017. 24 U.S. Department of Agriculture. USDA Funds 80 Distance Learning and Telemedicine Projects in 32 States. Accessed May 22, 2017. 25 The White House. America First - A Budget Blueprint to Make America Great Again. Accessed May 22, 2017. 26 Ibid. 27 Ibid.
